By Matt Porzio
Healthcare, one would think, is among the sectors leading this year’s mergers and acquisitions boom. But early-stage M&A activity in the industry over the past few quarters has actually been relatively soft. Could this indicate that healthcare M&A is about to take ill? That would be most surprising, particularly now as worries abound over global economic growth, since healthcare is relatively immune from such cyclicality.
There’s been no lack of healthcare deals in the headlines. Every week, it seems, a major health insurer, provider, or pharma manufacturer is announcing a multi-billion dollar acquisition. But behind the headlines is data that paint a less than rosy picture.
On a year-over-year basis, early-stage global healthcare M&A activity, as measured by Intralinks’ monitoring of pending deals in due diligence, remained nominally flat through the first quarter of the year. Only this past quarter did we see a slight uptick in volume. And, the last six months compared to the same period last year are flat as well.
A closer analysis of the data helps explain the apparent dichotomy between the headlines and the numbers. First, early stage healthcare deal activity spiked around the globe in early 2014, creating a very tough comparison for Q1 of 2015. The comparison was especially challenging in North America where Q1 2014 due diligence M&A activity saw a dramatic uptick, eventually leading to over 2,600 announced deals in 2014, a strong showing for the sector.
